SEO Marketing Research

SEO Marketing Research header image 1

Business process outsourcing (BPO): Relationship risk factors in business

Although a mature and seamless relationship would most likely enhance the benefits of outsourcing, failure in the BPO relationship can lead to negative and potentially irreparable consequences.

The business literature is rife with stories about BPO relationships gone had, and there will be many more in the coming years.

As the BPO revolution picks up steam, no doubt many new vendor firms entering the market will make claims about capabilities and capacities they do not possess. Unwary BPO buyers will get burned, and large amounts of money will go to waste.

→ 257 CommentsTags:

Inadequate Service Level Agreements (SLA) Specifications

SLA specifications and metrics measure the provider’s performance during the operating phase of the business process outsourcing (BPO) Life Cycle.

They must be clearly defined and effectively designed into the contract because this is what allows the buyer a comfort level in turning over control of its business processes to the vendor.

The metrics associated with SLAs indicate whether the company is receiving the services it is paying for.

Many organizations have learned that the business process they have been performing for years is exceedingly difficult to describe in precise written terms.

→ 990 CommentsTags:

Inflexibility in BPO Agreements

It is necessary that BPO agreements be designed to provide for adequate flexibility in order to withstand both the dynamics of the business environment and the pressures that are inherent in such a contractual agreement.

Typically, BPO contract agreements are crafted on certain key assumptions pertaining to technologies, business conditions, personnel, and other relevant issues. But these assumptions are likely to change with time.

No matter how detailed the contract or favorable the terms, BPO agreements cannot anticipate all of the changes that occur in a dynamic, global business environment.

→ 44 CommentsTags:

Fundamental characteristics of the business process outsourcing (BPO) project

Four fundamental characteristics will give shape to any BPO relationship regardless of industry or BPO type:

The depth of the relationship
The scope of the relationship
The choice of assets to use
The choice of business culture to adopt and exploit

The depth of the BPO relationship depends on the criticality of the outsourced business process.

The closer the outsourced process is to the core business process of the BPO buyer, the greater the depth required in the BPO relationship.

Based on the importance of the outsourced functions and how these functions would change or evolve, the resulting relationships can be as follows:

→ 43 CommentsTags:

Managing the Buyer-Vendor relationship

Managing the business process outsourcing (BPO) relationship successfully is a challenge for buyers and vendors alike.

Notwithstanding the potential benefits of outsourcing the complex nature of an outsourcing agreement lends itself to a variety of challenging relationship management issues.

Although relationship management is a key component of any successful outsourcing project, it is the most often neglected one.

Companies considering BPO must be aware that the traditional tactics for managing relationships between buyers and suppliers are inadequate for managing a BPO relationship.

→ 84 CommentsTags:

Business process outsourcing (BPO) relationship success factors

The project management plan can be changed and altered over the life of the BPO project. At the same time, changes to the plan should only be done in a systematic and carefully considered manner.

The PMT should include members from both the buyer and vendor organizations. These individuals must learn to adapt to and trust each other, while balancing the needs of their respective organizations. This balancing act is difficult, but not impossible.

The project management plan established between the BPO buyer and vendor is intimately related to the contract between the panties, but is not confined to the contract alone.

→ 1,407 CommentsTags:

Business continuity and benchmarking

The final consideration in managing the business process outsourcing (BPO) transition is to ensure business continuity throughout the process.

It is to be expected that performance indicators for the outsourced process are likely to be down or flat during the early stages of the transition.

It might also occur that processes tightly linked to the outsourced process will also experience performance difficulties during this phase.

Despite the expected performance dips, managers should have detailed performance benchmarks that provide a means of judging the extent f the effect and whether intervention is required.

→ 326 CommentsTags:

Managing culture beyond the outsourced process

Beyond the organizational units immediately affected by the business process outsourcing (BPO) project are employees who are friends, relatives, and acquaintances of those affected BPO project managers must not overlook the ripple effects that are created by outsourcing and the threat that others might fed from witnessing the introduction of BPO into neighboring work units.

In addition to the heightened sense of insecurity that may arise, there will be concerns about workflow issues and day-to-day business continuity.

Organizational units that work closely with the outsourced function may be concerned about the capability of the vendor to achieve the same level of productivity. Other concerns that may arise are as follows:

→ 1,475 CommentsTags:

Managing job loss and changeover

Managing job loss and changeover is assuredly among the most difficult challenges that managers face, no matter what the cause of the upheaval.

It is no secret that most rank-and-file employees in the organization who are likely to be displaced by a business process outsourcing (BPO) initiative are living paycheck to paycheck.

The looming prospect of job displacement as a result of the organization’s decision to outsource is not likely to be met with shouts of joy.

Whether the anticipated job displacement includes termination or shifting responsibilities, the reaction is predictable: Some will rush for the exit, others will cower and hope for the best, others will fight, and some will simply deny reality.

→ 22 CommentsTags:

Business process outsourcing: Communicating with employees

Effective communication with employees is vital to the business process outsourcing (BPO) transition process. A lack of communication from managers to employees does not mean a lack of communication within the organization.

Organizational space abhors a communication vacuum. If the space is not filled with deliberate, optimistic, and directive messages from leadership, it will be filled by rumors, gossip, and speculation from the employees.

People need to understand their environment and will settle for half-baked speculative explanations if no better alternatives are available.

→ 20 CommentsTags: